CUNA fears cryptocurrency and blockchain based financial platforms are creating an unregulated financial sector that could have major repercussions to the economy, it wrote to the Senate Banking, Housing, and Urban Affairs Committee Tuesday.

“Congress should look for ways to regulate the delivery of financial services using digital currencies to ensure that consumers are protected in the same way if they received financial services from a financial institution,” the letter reads. “Furthermore, Congress should look for ways enable credit unions and other financial institution to provide digital asset related services, so that these services can be properly overseen by regulators.”

Federal regulators are currently analyzing and responding to the possible impact of digital currencies, CUNA Notes, including NCUA. CUNA submitted detailed recommendations in comments filed in October with the agency.

“These include authorizing credit unions to offer digital asset custody services to credit unions members and ensuring that the regulator does not impede credit unions’ ability to offer digital asset related services that are permissible under the Federal Credit Unions Act,” the letter reads.

CUNA also notes that, while digital ledger technology (DLT) allows for innovation, it still must be overseen.

“We see no reason why innovation should change the government’s role in overseeing an industry that uses DLT. The fundamental issue with DLT as applied to the delivery of financial services is that it disintermediates financial services providers and this is where the government regulates financial services,” the letter reads. “Eliminating or weakening the backbone of the U.S. and world economy will have consequences and we think that these consequences should be understood before consumers and the economy is harmed.”